PhD defence M.M. (Maarten) Brandt

Measuring preferences is at the core of economic analysis. If we know someone’s preferences, we can predict what goods this person may buy. Preferences can be inferred from choices people make. However, this requires that people choose according to their preferences. It is possible to test this, but that requires observing all consumption relevant to the decision, which is often not possible. Even in laboratory experiments some relevant consumption may be unobserved, because we do not observe consumption outside the lab and this may interact with the choices in the lab. In this thesis it is shown that, under conditions which are typically met in experiments, it is still valid to test the hypothesis that people choose according to their preferences. Behavioural findings have shown that choices are influenced by the context in which decisions are made. Risk aversion measured under gains tends to reflect to risk loving preferences under losses, and social choices are influenced by the kindness of others. In this thesis, evidence is presented that reciprocal choices stem from reciprocal preferences, and a method is proposed to deal with such changing preferences. Risk aversion is a preference against taking risks. Higher order risk preferences, by contrast, are all about how one wants to face risks given that these are unavoidable, such as whether one prefers to take risks in a situation where one’s wealth is higher or lower. In this thesis, evidence is presented that higher order risk preferences depend on whether outcomes are framed as losses or gains.

The public defence will take place at the Prof. Andries Queridoroom, 3rd floor Education Center, Erasmus MC. The ceremony will begin exactly at 09.30 hrs. In light of the solemn nature of the ceremony, we recommend that you do not take children under the age of 6 to the first part of the ceremony.